Hedge fund founder, Roslyn resident charged with fraud, bribery – Featured | #employeefraud | #recruitment | #corporatesecurity


Daniel Kamensky of Roslyn has been indicted in federal court on charges of fraud, extortion, and obstruction of justice. (Photo courtesy of the Jewish National Fund)

A hedge fund founder and Roslyn resident is facing charges in federal court following an alleged scheme to profit off the bankruptcy of luxury retailer Neiman Marcus.

Daniel Kamensky, the founder and principal of Marble Ridge Capital, was charged on Thursday with securities fraud, wire fraud, extortion and bribery in connection with bankruptcy, and obstruction of justice by the Manhattan-based U.S. Attorney’s Office of the Southern District of New York, according to a statement from the office.

“Kamensky’s alleged criminal acts occurred in connection with his scheme to pressure a rival bidder to abandon its higher bid for assets in connection with Neiman Marcus’s bankruptcy proceedings so that Marble Ridge could obtain those assets for a lower price,” the statement read. “Kamensky then attempted to persuade the rival bidder to cover up the scheme.”

The attorney’s office says that Kamensky’s fund Marble Ridge, which specializes in investments into distressed situations, including bankruptcies and had assets under management of more than $1 billion as of early 2020, was appointed onto a committee on unsecured creditors for Neiman Marcus shortly after the retailer declared bankruptcy in May of 2020.

“During the bankruptcy process, the committee had negotiated with the owners of Neiman Marcus to obtain certain securities, known as MyTheresa Series B Shares (the ‘MYT Securities’), and ultimately, the committee was successful in coming to a settlement to obtain 140 million shares of MYT Securities for the benefit of certain unsecured creditors of the bankruptcy estate,” the U.S. Attorney’s office said.  “In July 2020, Kamensky was negotiating with the Committee for Marble Ridge to offer 20 cents per share to purchase the MYT Securities from any unsecured creditor who preferred to receive cash, rather than MYT Securities, as part of that settlement.”

Attorneys then say that on July 31, Kamensky learned that a diversified financial services company, identified in court proceedings as “the investment bank” and headquartered in New York City, had informed the committee that it was interested in bidding a price between 30 and 40 cents per share, higher than Kamensky’s bid, to purchase MYT Securities from any unsecured creditor who was interested in receiving cash.

“That afternoon, Kamensky sent messages to a senior trader at the investment bank  telling him not to place a bid, and followed those messages up with a phone call with IB Employee-1 and a senior analyst of the investment bank,” the office said. “During that call, Kamensky asserted that Marble Ridge should have the exclusive right to purchase MYT Securities, and threatened to use his official role as co-chair of the committee to prevent the investment bank from acquiring the MYT Securities. Kamensky also stated that Marble Ridge had been a client of the investment bank in the past but that if the investment bank moved forward with its bid, then Marble Ridge would cease doing business with the investment bank.”

The unnamed bank then decided to not make a bid to purchase the MYT securities, and informed the legal adviser to the committee of its decision, and would tell a legal adviser that they made that decision because Kamensky, a client of the bank, had asked them not to, according to federal attorneys.

“Later that evening, Kamensky contacted [the employee of the bank] and attempted to influence what [the employee] would tell others, including the committee and law enforcement, about Kamensky’s attempt to block the Investment Bank’s bid for MYT Securities,” federal prosecutors said. “Kamensky said at the outset of the call, in substance, “this conversation never happened.”

Federal prosecutors say that during the call, Kamensky allegedly asked the bank employee to falsely say that they had been mistaken and that Kamensky had actually suggested that the bank bid only if it were serious.

“Do you understand…I can go to jail?” Kamensky is quoted as saying. “I pray you tell them that it was a huge misunderstanding, okay, and I’m going to invite you to bid and be part of the process…But I’m telling you; this is going to the U.S. Attorney’s Office. This is going to go to the court…[I]f you’re going to continue to tell them what you just told me, I’m going to jail, okay? Because they’re going to say that I abused my position as a fiduciary, which I probably did, right? Maybe I should go to jail. But I’m asking you not to put me in jail.”

Acting Manhattan U.S. Attorney Audrey Strauss said in a statement that Kamensky had “disregarded his fiduciary responsibility” in his actions.

“As alleged, Daniel Kamensky disregarded his fiduciary responsibility to unsecured creditors of Neiman Marcus – and broke the law – when he attempted to coerce a competitor to withdraw a higher bid for assets of the bankruptcy estate,” Strauss said. “As further alleged, acknowledging the illegality of his actions, Kamensky then attempted to obstruct an investigation by trying to persuade the competitor to change his account of the coercion, telling the competitor that otherwise ‘this is going to the U.S. Attorney’s Office.’  As today’s charges show, Kamensky was right about that.”

“As alleged, Kamensky intentionally violated his fiduciary duty as a member of the Official Committee of Unsecured Creditors in the Neiman Marcus bankruptcy by preventing the sale of securities to an investment bank so he could acquire the same securities at a significantly lower price for his own fund,” FBI Assistant Director-in-Charge William F. Sweeney said. “In a conversation with an employee of the investment bank, Kamensky went as far as to say, ‘Maybe I should go to jail.’  Today, we’ve removed the ‘maybe,’ and forced him to answer for his conduct.”

The attorney’s office says Marble Ridge resigned from the committee handling the Neiman Marcus bankruptcy and has advised its investors that it intends to begin winding down operations and returning investor capital. Marble Ridge Capital had no comment when reached.

Kamensky was previously a partner at Paulson & Company, and prior to that held roles at Lehman Brothers, Barclays Capital, and at associate at Simpson Thacher & Bartlett. He was previously honored as the recipient of the Jewish National Fund’s Theodore Herzl Leadership Award in 2017, having helped to found the organization’s Finance for Israel group, and is a former member of the board of trustees for the Schechter School of Long Island, which in 2019 named him a guest of honor at their annual gala. Efforts to reach both organizations for comment were unavailing.

The FBI’s investigation into the case is ongoing.





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